Liquid bees Collateral margin on option writing

F&O
1

Hi Team,

I know that 50% of the margin should be in cash component for Option writing when we use pledged margin. And 0.05% interest will be charged for the shortfall of the cash margin.

My question is below.

Let’s assume I have Rs 50,000 as margin which I got after pledging Gold bees.
I need to 1,00,000 for writing a nifty option. In this case, I can use the 50,000 Rs gold bees collateral margin as 50%.

I need to provide the remaining 50% as a cash component.

My question is, Shall I use liquid bees margin for the remaining 50% since Liquid bees are considered as the cash equivalent (Assume I have 50,000 Rs Liquid bees margin after pledging)?

In this scenario, will there be any interest charged?

There are some questions in the forum related to this. But I couldn’t get the conclusive answer.

Thanks

2 Likes
2

No as long as the margin remains 100k or below it.
Remember to keep spare margin coz it may increase while you r in the trade during volatile times.

3

I have pledged liquid bees and received Collateral (Liquid funds) Rs 100000

For Nifty FUT margin is required 1 Lakh, No balance in my funds but I have Collateral (Liquid funds) of Rs 100000

If I use the entire Liquid fund will be charged interest on this? for the 50 %
Interest will be applicable for the 50 % short fall amount?

4

There won’t be any interest charged. Margin received from pledging liquid bees is considered as cash equivalent. Though would suggest you maintain some cash in your account to cover losses and charges as collateral margin cannot be used towards this.

1 Like
5

But I can see the debit balance in my fund’s statement, For SPAN & Exposure which was blocked is shown as negative, I hope for that negative balance no interest will be there?